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Celanese Corporation Reports First Quarter 2021 Earnings; Raises Full Year Financial Outlook

Nachrichtenquelle: Business Wire (engl.)
22.04.2021, 22:25  |  101   |   |   

Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, today reported first quarter GAAP diluted earnings per share of $2.83 and adjusted earnings per share of $3.46. Net sales for the quarter were $1.8 billion as pricing increased by 15 percent from the prior quarter, more than offsetting a volume decline of 3 percent. In anticipation of Winter Storm Uri, the Company proactively brought down its three production facilities in Texas to protect its employees and assets. The Company subsequently flexed its global procurement and production networks to manage industry supply chain disruptions. Despite significant first quarter costs associated with the winter storm, the Company delivered operating profit of $326 million and adjusted EBIT of $482 million, both increases over pre-COVID earnings in the first quarter of 2020. During the quarter, the Company returned $328 million of cash to shareholders in the form of share repurchases and dividends. The Company continues to take actions to lift its earnings and cash generation profile, which along with a strong balance sheet, provide capacity to invest across a number of strategic growth priorities.

The difference between GAAP diluted earnings per share and adjusted earnings per share for the first quarter was primarily due to a $41 million adjustment for fixed overhead, freeze-related repairs, and restart costs related to Winter Storm Uri.

"As demand fundamentals continued to improve coming out of a very challenging 2020, we experienced unprecedented disruption as a result of Winter Storm Uri, including direct impacts to our employees and production facilities in Texas as well as extensive industry supply chain challenges. Our teams responded with great agility to repair and restart our facilities quickly and to navigate hundreds of obstacles to source, manufacture, and ship our products to our customers. Amid continuing supply chain and raw material challenges, we finished the first quarter with momentum and expect to deliver strong earnings performance across the remainder of 2021," said Lori Ryerkerk, chairman and chief executive officer.

First Quarter 2021 Financial Highlights:

 

 

Three Months Ended

 

March 31,
2021

 

December 31,
2020

 

March 31,
2020

 

(unaudited)

 

(In $ millions, except per share data)

Net Sales

 

 

 

 

 

Engineered Materials

645

 

 

572

 

 

563

 

Acetate Tow

119

 

 

134

 

 

129

 

Acetyl Chain

1,056

 

 

910

 

 

799

 

Intersegment Eliminations

(22)

 

 

(25)

 

 

(31)

 

Total

1,798

 

 

1,591

 

 

1,460

 

 

 

 

 

 

 

Operating Profit (Loss)

 

 

 

 

 

Engineered Materials

130

 

 

62

 

 

102

 

Acetate Tow

16

 

 

30

 

 

27

 

Acetyl Chain

251

 

 

186

 

 

135

 

Other Activities

(71)

 

 

(75)

 

 

(70)

 

Total

326

 

 

203

 

 

194

 

 

 

 

 

 

 

Net Earnings (Loss)

323

 

 

1,454

 

 

220

 

 

 

 

 

 

 

Adjusted EBIT(1)

 

 

 

 

 

Engineered Materials

160

 

 

82

 

 

165

 

Acetate Tow

61

 

 

59

 

 

67

 

Acetyl Chain

282

 

 

187

 

 

139

 

Other Activities

(21)

 

 

(28)

 

 

(29)

 

Total

482

 

 

300

 

 

342

 

 

 

 

 

 

 

Equity Earnings and Dividend Income, Other Income (Expense)

 

 

 

 

 

Engineered Materials

25

 

 

15

 

 

53

 

Acetate Tow

41

 

 

29

 

 

37

 

 

 

 

 

 

 

Operating EBITDA(1)

570

 

 

387

 

 

425

 

Diluted EPS - continuing operations

$

2.83

 

 

$

12.50

 

 

$

1.88

 

Diluted EPS - total

$

2.82

 

 

$

12.50

 

 

$

1.82

 

Adjusted EPS(1)

$

3.46

 

 

$

2.09

 

 

$

2.29

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities

98

 

 

979

 

 

(128)

 

Net cash provided by (used in) financing activities

(371)

 

 

(933)

 

 

(16)

 

Net cash provided by (used in) operating activities

116

 

 

274

 

 

259

 

Free cash flow(1)

19

 

 

181

 

 

135

 

_____________________________

(1)

See "Non-US GAAP Financial Measures" below.

First Quarter 2021 Highlights:

• Hosted a virtual Investor Day on March 25, 2021, in which members of the executive management team provided details on the Company's business strategies and path for growth through 2023.

• Announced a three-year plan to expand Engineered Materials' compounding capacities at its Asia facilities, including Nanjing, China; Suzhou, China; and Silvassa, India.

• Announced an expansion of Engineered Materials' GUR ultra-high molecular weight polyethylene production capacity in Europe to come online in 2024 to support the growing electric vehicle market.

• Announced a project to utilize recycled carbon dioxide as an alternative feedstock in the production of methanol at the Company's Clear Lake, Texas facility.

• Announced further investments in the Acetyl Chain's downstream vinyls portfolio through facility expansions, new unit builds, and debottleneck projects in Europe and Asia.

• Extended a long-term contract with Linde Gas Singapore Pte. Ltd. for the supply of carbon monoxide to the Acetyl Chain's Singapore facility.

First Quarter 2021 Business Segment Overview

Engineered Materials

Engineered Materials reported net sales of $645 million in the first quarter, a 13 percent increase from the prior quarter due to sequential increases in pricing and volume. Volume expanded 6 percent driven by strong sequential demand growth, particularly in Europe. Continued strength in automotive, industrial, and electronics end-markets, as well as modest recovery in medical applications, contributed to volume expansion in the first quarter. Pricing increased 6 percent sequentially driven by realization of pricing initiatives implemented during the first quarter to keep pace with raw material inflation, as well as product mix. Engineered Materials generated first quarter GAAP operating income of $130 million and adjusted EBIT of $160 million. This represents a return to pre-COVID adjusted earnings in line with the first quarter of 2020, as the base business mitigated a $28 million year over year decline in affiliate earnings by leveraging its project pipeline and growth programs. On a sequential basis, variable margin expansion in the base business and an additional $10 million in affiliate earnings resulted in operating profit and adjusted EBIT margins of 20 percent and 25 percent, respectively.

Acetyl Chain

The Acetyl Chain generated net sales of $1.1 billion, due to a 23 percent pricing increase partially offset by a 7 percent volume decline from the prior quarter. Pricing increased sequentially due to record Chinese acetic acid pricing and tightened industry conditions as a result of Winter Storm Uri, which temporarily reduced global acetic acid supply by approximately 5 percent during the first quarter. Sequential volume declined primarily due to Winter Storm Uri as well as Chinese New Year and typical winter seasonality, although fundamental demand for acetyls remained strong. In response to the impact of the storm on its US Gulf Coast production, the business immediately increased production rates at its facilities in China and Singapore. Significant quantities of acetic acid and VAM were then shipped to Europe from Asia, rather than shipped from the US as typical. The business flexed its procurement and supply chain networks to navigate disruptions, including sourcing 40kt of methanol for restarting Clear Lake acetic acid production. Despite incurring costs of approximately $55 million related to the storm, of which nearly $30 million unfavorably impacted adjusted EBIT, the Acetyl Chain generated GAAP operating profit of $251 million and adjusted EBIT of $282 million. The business delivered operating profit margin of 24 percent and adjusted EBIT margin of 27 percent, expansions of 340 and 620 basis points, respectively, over the prior quarter.

Acetate Tow

Acetate Tow recorded net sales of $119 million, which reflected a sequential volume decrease of 10 percent due to reduced raw material and logistics availability. First quarter GAAP operating profit was $16 million and adjusted EBIT was $61 million, consistent with the prior quarter, as higher dividends from affiliates offset the decline in volume. Dividends from affiliates in the first quarter were $41 million, an increase of $12 million sequentially due to the timing of dividend payments.

Cash Flow and Tax

The Company generated first quarter operating cash flow of $116 million and free cash flow of $19 million, inclusive of a $100 million payment for the European Commission settlement. Capital expenditures in the first quarter were $92 million and included capital expenditures for the acetic acid reconfiguration expansion within the Acetyl Chain business. The Company returned $328 million in cash to shareholders during the first quarter, including $250 million of share repurchases and $78 million of dividends.

The effective US GAAP tax rate of 21 percent in the first quarter was comparable to the same quarter of last year. During the first quarter, the 2021 tax rate for adjusted earnings per share was increased from an estimated 13 percent to 14 percent, primarily due to an increase in earnings in higher tax jurisdictions.

Outlook

"Our teams have maintained the momentum with which we entered 2021 despite the challenges of Winter Storm Uri," continued Ryerkerk. "The unique value of our global positions and unparalleled optionality, particularly within our Acetyl Chain business, was demonstrated in our first quarter performance. Demand for our Engineered Materials and Acetyl Chain products remains strong across most end markets. Amid a tightened industry landscape following the storm, we are well positioned to continue to deliver leading value. Inclusive of current industry dynamics, higher inventory costs from Winter Storm Uri, and our minimal turnaround needs due to previous acceleration of scheduled turnarounds, we expect second quarter 2021 adjusted earnings of approximately $4.00 per share, which would be an all-time record. Driven by this elevated performance across the first half, we now expect adjusted earnings of $12.50 to $13.50 per share in 2021, reflecting a moderation in Acetyl Chain industry utilization and pricing as the year progresses."

The Company is unable to reconcile forecasted adjusted earnings per share growth to US GAAP diluted earnings per share without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains/losses, is not practical. For more information, see "Non-GAAP Financial Measures" below.

The Company's prepared remarks related to the first quarter will be posted on its website at investors.celanese.com under Financial Information/Financial Document Library on April 22, 2021. Information about Non-US GAAP measures is included in a Non-US GAAP Financial Measures and Supplemental Information document posted on our investor relations website under Financial Information/Non-GAAP Financial Measures. See also "Non-GAAP Financial Measures" below.

Celanese Corporation is a global chemical leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Our businesses use the full breadth of Celanese's global chemistry, technology and commercial expertise to create value for our customers, employees, shareholders and the corporation. As we partner with our customers to solve their most critical business needs, we strive to make a positive impact on our communities and the world through The Celanese Foundation. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2020 net sales of $5.7 billion. For more information about Celanese Corporation and its product offerings, visit www.celanese.com or our blog at www.celaneseblog.com.

Forward-Looking Statements

This release may contain "forward-looking statements," which include information concerning the Company's plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company will realize these expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the results expressed or implied in the forward-looking statements contained in this release. These risks and uncertainties include, among other things: the extent to which the COVID-19 pandemic continues to adversely impact the economic environment, market demand and our operations, as well as the pace of any economic recovery; changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate; the length and depth of product and industry business cycles, particularly in the automotive, electrical, mobility, textiles, medical, electronics and construction industries; changes in the price and availability of raw materials, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, wood pulp and fuel oil and the prices for electricity and other energy sources; the ability to pass increases in raw material prices on to customers or otherwise improve margins through price increases; the ability to maintain plant utilization rates and to implement planned capacity additions and expansions as well as facility turnarounds; the ability to reduce or maintain their current levels of production costs and to improve productivity by implementing technological improvements to existing plants; the ability to identify desirable potential acquisition targets and to complete acquisition or investment transactions consistent with the Company's strategy; the ability to identify and execute on other attractive investment opportunities towards which to deploy capital; increased price competition and the introduction of competing products by other companies; market acceptance of our products and technology; compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, cyber security incidents, terrorism or political unrest, public health crises (including, but not limited to, the COVID-19 pandemic); other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, the occurrence of acts of war or terrorist incidents or as a result of weather or natural disasters or other crises including public health crises; the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to the Company; changes in the degree of intellectual property and other legal protection afforded to our products or technologies, or the theft of such intellectual property; potential liability for remedial actions and increased costs under existing or future environmental, health and safety regulations, including those relating to climate change; potential liability resulting from pending or future litigation, or from changes in the laws, regulations or policies of governments or other governmental activities in the countries in which we operate; changes in currency exchange rates and interest rates; our level of indebtedness, which could diminish our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy or the chemicals industry; tax rates and changes thereto; our ability to obtain regulatory approval for, and satisfy closing conditions to, any transactions described herein; and various other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission.

The extent to which COVID-19 will adversely impact our business, financial condition and results of operations will depend on numerous evolving factors, which are highly uncertain, rapidly changing and cannot be predicted, including: the extent of any resurgence in infections and the spread of the disease, and the effectiveness of any vaccines; additional governmental, business and individual actions to contain the spread of the outbreak, including social distancing, work-at-home, stay-at-home and shelter-in-place orders and shutdowns, travel restrictions and quarantines; the extent to which these conditions depress economic activity generally and demand for our products specifically and affect the financial markets; the effect of the outbreak on our customers, suppliers, supply chain and other business partners; our ability during the outbreak to provide our products and services, including the health and well-being of our employees; business disruptions caused by actual or potential plant, workplace and office closures; the risk that we could be exposed to liability, negative publicity or reputational harm related to any incidents of actual or perceived transmission of COVID-19 among employees at our facilities; the ability of our customers to pay for our products and services during and following the outbreak; the impact of the outbreak on the financial markets and economic activity generally; our ability to access usual sources of liquidity on reasonable terms; and our ability to comply with the financial covenant in our Credit Agreement if a material and prolonged economic downturn results in increased indebtedness or substantially lower EBITDA.

Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

Non-GAAP Financial Measures

Presentation

This document presents the Company's three business segments, Engineered Materials, Acetate Tow and Acetyl Chain.

Use of Non-US GAAP Financial Information

This release uses the following Non-US GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, adjusted earnings per share and free cash flow. These measures are not recognized in accordance with US GAAP and should not be viewed as an alternative to US GAAP measures of performance or liquidity. The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin is operating margin; for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; and for free cash flow is net cash provided by (used in) operations.

Definitions of Non-US GAAP Financial Measures

Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8 of our Non-US GAAP Financial Measures and Supplemental Information document). We do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales.

• Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization.

• Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.

Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a of our Non-US GAAP Financial Measures and Supplemental Information document summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.

• Free cash flow is a liquidity measure used by the Company and is defined by the Company as cash flow from operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway").

Reconciliation of Non-US GAAP Financial Measures

Reconciliations of the Non-US GAAP financial measures used in this press release to the comparable US GAAP financial measure, together with information about the purposes and uses of Non-US GAAP financial measures, are included in our Non-US GAAP Financial Measures and Supplemental Information document filed as an exhibit to our Current Report on Form 8-K filed with the SEC on or about April 22, 2021 and also available on our website at investors.celanese.com under Financial Information/Financial Document Library.

Results Unaudited

The results in this document, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year.

Supplemental Information

Additional information about our prior period performance is included in our Quarterly Reports on Form 10-Q and in our Non-US GAAP Financial Measures and Supplemental Information document.

 

Consolidated Statements of Operations - Unaudited

 

 

Three Months Ended

 

March 31,
2021

 

December 31,
2020

 

March 31,
2020

 

(In $ millions, except share and per share data)

Net sales

1,798

 

 

1,591

 

 

1,460

 

Cost of sales

(1,313)

 

 

(1,215)

 

 

(1,112)

 

Gross profit

485

 

 

376

 

 

348

 

Selling, general and administrative expenses

(137)

 

 

(137)

 

 

(125)

 

Amortization of intangible assets

(6)

 

 

(5)

 

 

(5)

 

Research and development expenses

(20)

 

 

(20)

 

 

(17)

 

Other (charges) gains, net

6

 

 

(2)

 

 

(6)

 

Foreign exchange gain (loss), net

3

 

 

(3)

 

 

(1)

 

Gain (loss) on disposition of businesses and assets, net

(5)

 

 

(6)

 

 

 

Operating profit (loss)

326

 

 

203

 

 

194

 

Equity in net earnings (loss) of affiliates

29

 

 

21

 

 

57

 

Non-operating pension and other postretirement employee benefit (expense) income

38

 

 

(66)

 

 

28

 

Interest expense

(25)

 

 

(26)

 

 

(28)

 

Interest income

1

 

 

2

 

 

2

 

Dividend income - equity investments

42

 

 

28

 

 

37

 

Gain (loss) on sale of investments in affiliates

 

 

1,408

 

 

 

Other income (expense), net

(2)

 

 

1

 

 

2

 

Earnings (loss) from continuing operations before tax

409

 

 

1,571

 

 

292

 

Income tax (provision) benefit

(85)

 

 

(117)

 

 

(65)

 

Earnings (loss) from continuing operations

324

 

 

1,454

 

 

227

 

Earnings (loss) from operation of discontinued operations

(1)

 

 

(1)

 

 

(7)

 

Income tax (provision) benefit from discontinued operations

 

 

1

 

 

 

Earnings (loss) from discontinued operations

(1)

 

 

 

 

(7)

 

Net earnings (loss)

323

 

 

1,454

 

 

220

 

Net (earnings) loss attributable to noncontrolling interests

(1)

 

 

(1)

 

 

(2)

 

Net earnings (loss) attributable to Celanese Corporation

322

 

 

1,453

 

 

218

 

Amounts attributable to Celanese Corporation

 

 

 

 

 

Earnings (loss) from continuing operations

323

 

 

1,453

 

 

225

 

Earnings (loss) from discontinued operations

(1)

 

 

 

 

(7)

 

Net earnings (loss)

322

 

 

1,453

 

 

218

 

Earnings (loss) per common share - basic

 

 

 

 

 

Continuing operations

2.85

 

 

12.56

 

 

1.89

 

Discontinued operations

(0.01)

 

 

 

 

(0.06)

 

Net earnings (loss) - basic

2.84

 

 

12.56

 

 

1.83

 

Earnings (loss) per common share - diluted

 

 

 

 

 

Continuing operations

2.83

 

 

12.50

 

 

1.88

 

Discontinued operations

(0.01)

 

 

 

 

(0.06)

 

Net earnings (loss) - diluted

2.82

 

 

12.50

 

 

1.82

 

Weighted average shares (in millions)

 

 

 

 

 

Basic

113.5

 

 

115.7

 

 

119.3

 

Diluted

114.0

 

 

116.3

 

 

119.9

 

Consolidated Balance Sheets - Unaudited

 

 

As of
March 31,

 

As of
December 31,

 

2021

2020

 

(In $ millions)

ASSETS

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

791

 

 

955

 

Trade receivables - third party and affiliates, net

959

 

 

792

 

Non-trade receivables, net

551

 

 

450

 

Inventories

1,025

 

 

978

 

Marketable securities

331

 

 

533

 

Other assets

53

 

 

55

 

Total current assets

3,710

 

 

3,763

 

Investments in affiliates

796

 

 

820

 

Property, plant and equipment, net

3,876

 

 

3,939

 

Operating lease right-of-use assets

221

 

 

232

 

Deferred income taxes

255

 

 

259

 

Other assets

456

 

 

411

 

Goodwill

1,134

 

 

1,166

 

Intangible assets, net

308

 

 

319

 

Total assets

10,756

 

 

10,909

 

LIABILITIES AND EQUITY

 

 

 

Current Liabilities

 

 

 

Short-term borrowings and current installments of long-term debt - third party and affiliates

497

 

 

496

 

Trade payables - third party and affiliates

906

 

 

797

 

Other liabilities

489

 

 

680

 

Income taxes payable

43

 

 

 

Total current liabilities

1,935

 

 

1,973

 

Long-term debt, net of unamortized deferred financing costs

3,135

 

 

3,227

 

Deferred income taxes

530

 

 

509

 

Uncertain tax positions

255

 

 

240

 

Benefit obligations

616

 

 

643

 

Operating lease liabilities

187

 

 

208

 

Other liabilities

191

 

 

214

 

Commitments and Contingencies

 

 

 

Stockholders' Equity

 

 

 

Treasury stock, at cost

(4,744)

 

 

(4,494)

 

Additional paid-in capital

253

 

 

257

 

Retained earnings

8,335

 

 

8,091

 

Accumulated other comprehensive income (loss), net

(302)

 

 

(328)

 

Total Celanese Corporation stockholders' equity

3,542

 

 

3,526

 

Noncontrolling interests

365

 

 

369

 

Total equity

3,907

 

 

3,895

 

Total liabilities and equity

10,756

 

 

10,909

 

Non-US GAAP Financial Measures and Supplemental Information

April 22, 2021

In this document, the terms the "Company," "we" and "our" refer to Celanese Corporation and its subsidiaries on a consolidated basis.

Purpose

The purpose of this document is to provide information of interest to investors, analysts and other parties including supplemental financial information and reconciliations and other information concerning our use of non-US GAAP financial measures. This document is updated quarterly.

Presentation

This document presents the Company's three business segments, Engineered Materials, Acetate Tow and Acetyl Chain.

Use of Non-US GAAP Financial Measures

From time to time, management may publicly disclose certain numerical "non-GAAP financial measures" in the course of our earnings releases, financial presentations, earnings conference calls, investor and analyst meetings and otherwise. For these purposes, the Securities and Exchange Commission ("SEC") defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with US GAAP, and vice versa for measures that include amounts, or are subject to adjustments that effectively include amounts, that are excluded from the most directly comparable US GAAP measure so calculated and presented. For these purposes, "GAAP" refers to generally accepted accounting principles in the United States.

Non-GAAP financial measures disclosed by management are provided as additional information to investors, analysts and other parties because the Company believes them to be important supplemental measures for assessing our financial and operating results and as a means to evaluate our financial condition and period-to-period comparisons. These non-GAAP financial measures should be viewed as supplemental to, and should not be considered in isolation or as alternatives to, net earnings (loss), operating profit (loss), operating margin, cash flow from operating activities (together with cash flow from investing and financing activities), earnings per share or any other US GAAP financial measure. These non-GAAP financial measures should be considered within the context of our complete audited and unaudited financial results for the given period, which are available on the Financial Information/Financial Document Library page of our website, investors.celanese.com. The definition and method of calculation of the non-GAAP financial measures used herein may be different from other companies' methods for calculating measures with the same or similar titles. Investors, analysts and other parties should understand how another company calculates such non-GAAP financial measures before comparing the other company's non-GAAP financial measures to any of our own. These non-GAAP financial measures may not be indicative of the historical operating results of the Company nor are they intended to be predictive or projections of future results.

Pursuant to the requirements of SEC Regulation G, whenever we refer to a non-GAAP financial measure, we will also present in this document, in the presentation itself or on a Form 8-K in connection with the presentation on the Financial Information/Financial Document Library page of our website, investors.celanese.com, to the extent practicable, the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.

This document includes definitions and reconciliations of non-GAAP financial measures used from time to time by the Company.

Specific Measures Used

This document provides information about the following non-GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, operating EBITDA margin, operating profit (loss) attributable to Celanese Corporation, adjusted earnings per share, net debt, free cash flow and return on invested capital (adjusted). The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin and operating EBITDA margin is operating margin; for operating profit (loss) attributable to Celanese Corporation is operating profit (loss); for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; for net debt is total debt; for free cash flow is net cash provided by (used in) operations; and for return on invested capital (adjusted) is net earnings (loss) attributable to Celanese Corporation divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity.

Definitions

  • Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8). We believe that adjusted EBIT provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of unusual, non-operational or restructuring-related activities that affect comparability. Our management recognizes that adjusted EBIT has inherent limitations because of the excluded items. Adjusted EBIT is one of the measures management uses for planning and budgeting, monitoring and evaluating financial and operating results and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales. Adjusted EBIT margin has the same uses and limitations as Adjusted EBIT.
  • Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization. We believe that Operating EBITDA provides transparent and useful information to investors, analysts and other parties in evaluating our operating performance relative to our peer companies. Operating EBITDA margin is defined by the Company as Operating EBITDA divided by net sales. Operating EBITDA margin has the same uses and limitations as Operating EBITDA.
  • Operating profit (loss) attributable to Celanese Corporation is defined by the Company as operating profit (loss), less earnings (loss) attributable to noncontrolling interests ("NCI"). We believe that operating profit (loss) attributable to Celanese Corporation provides transparent and useful information to management, investors, analysts and other parties in evaluating our core operational performance. Operating margin attributable to Celanese Corporation is defined by the Company as operating profit (loss) attributable to Celanese Corporation divided by net sales. Operating margin attributable to Celanese Corporation has the same uses and limitations as Operating profit (loss) attributable to Celanese Corporation.
  • Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We believe that adjusted earnings per share provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of the above stated items that affect comparability and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.

    Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.
  • Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway"). We believe that free cash flow provides useful information to management, investors, analysts and other parties in evaluating the Company's liquidity and credit quality assessment because it provides an indication of the long-term cash generating ability of our business. Although we use free cash flow as a measure to assess the liquidity generated by our business, the use of free cash flow has important limitations, including that free cash flow does not reflect the cash requirements necessary to service our indebtedness, lease obligations, unconditional purchase obligations or pension and postretirement funding obligations.
  • Net debt is defined by the Company as total debt less cash and cash equivalents. We believe that net debt provides useful information to management, investors, analysts and other parties in evaluating changes to the Company's capital structure and credit quality assessment.
  • Return on invested capital (adjusted) is defined by the Company as adjusted EBIT, tax effected using the adjusted tax rate, divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity. We believe that return on invested capital (adjusted) provides useful information to management, investors, analysts and other parties in order to assess our income generation from the point of view of our stockholders and creditors who provide us with capital in the form of equity and debt and whether capital invested in the Company yields competitive returns.

Supplemental Information

Supplemental Information we believe to be of interest to investors, analysts and other parties includes the following:

  • Net sales for each of our business segments and the percentage increase or decrease in net sales attributable to price, volume, currency and other factors for each of our business segments.
  • Cash dividends received from our equity investments.
  • For those consolidated ventures in which the Company owns or is exposed to less than 100% of the economics, the outside stockholders' interests are shown as NCI. Beginning in 2014, this includes Fairway for which the Company's ownership percentage is 50%. Amounts referred to as "attributable to Celanese Corporation" are net of any applicable NCI.

Results Unaudited

The results in this document, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year.

Table 1
Adjusted EBIT and Operating EBITDA - Reconciliation of Non-GAAP Measures - Unaudited

 

 

Q1 '21

 

2020

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

(In $ millions)

Net earnings (loss) attributable to Celanese Corporation

322

 

 

1,985

 

 

1,453

 

 

207

 

 

107

 

 

218

 

(Earnings) loss from discontinued operations

1

 

 

12

 

 

 

 

2

 

 

3

 

 

7

 

Interest income

(1

)

 

(6

)

 

(2

)

 

(1

)

 

(1

)

 

(2

)

Interest expense

25

 

 

109

 

 

26

 

 

28

 

 

27

 

 

28

 

Income tax provision (benefit)

85

 

 

247

 

 

117

 

 

30

 

 

35

 

 

65

 

Certain Items attributable to Celanese Corporation (Table 8)

50

 

 

(1,216

)

 

(1,294

)

 

24

 

 

28

 

 

26

 

Adjusted EBIT

482

 

 

1,131

 

 

300

 

 

290

 

 

199

 

 

342

 

Depreciation and amortization expense(1)

88

 

 

344

 

 

87

 

 

88

 

 

86

 

 

83

 

Operating EBITDA

570

 

 

1,475

 

 

387

 

 

378

 

 

285

 

 

425

 

 

 

Q1 '21

 

2020

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

(In $ millions)

Engineered Materials

2

 

 

5

 

 

2

 

 

1

 

 

 

 

2

 

Acetate Tow

 

 

 

 

 

 

 

 

 

 

 

Acetyl Chain

 

 

1

 

 

 

 

 

 

1

 

 

 

Other Activities(2)

 

 

 

 

 

 

 

 

 

 

 

Accelerated depreciation and amortization expense

2

 

 

6

 

 

2

 

 

1

 

 

1

 

 

2

 

Depreciation and amortization expense(1)

88

 

 

344

 

 

87

 

 

88

 

 

86

 

 

83

 

Total depreciation and amortization expense

90

 

 

350

 

 

89

 

 

89

 

 

87

 

 

85

 

______________________________

(1)

Excludes accelerated depreciation and amortization expense as detailed in the table above, which amounts are included in Certain Items above.

(2)

Other Activities includes corporate Selling, general and administrative ("SG&A") expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

 
Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited
 

Q1 '21

 

2020

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

(In $ millions, except percentages)

Operating Profit (Loss) / Operating Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

130

 

 

20.2

%

 

235

 

 

11.3

%

 

62

 

 

10.8

%

 

84

 

 

16.0

%

 

(13

)

 

(3.1

)%

 

102

 

 

18.1%

Acetate Tow

16

 

 

13.4

%

 

118

 

 

22.7

%

 

30

 

 

22.4

%

 

30

 

 

23.3

%

 

31

 

 

24.4

%

 

27

 

 

20.9%

Acetyl Chain(1)

251

 

 

23.8

%

 

563

 

 

17.9

%

 

186

 

 

20.4

%

 

121

 

 

15.6

%

 

121

 

 

18.3

%

 

135

 

 

16.9%

Other Activities(2)

(71

)

 

 

 

(252

)

 

 

 

(75

)

 

 

 

(51

)

 

 

 

(56

)

 

 

 

(70

)

 

 

Total

326

 

 

18.1

%

 

664

 

 

11.7

%

 

203

 

 

12.8

%

 

184

 

 

13.0

%

 

83

 

 

7.0

%

 

194

 

 

13.3%

Less: Net Earnings (Loss) Attributable to NCI(1)

1

 

 

 

 

7

 

 

 

 

1

 

 

 

 

2

 

 

 

 

2

 

 

 

 

2

 

 

 

Operating Profit (Loss) Attributable to Celanese Corporation

325

 

 

18.1

%

 

657

 

 

11.6

%

 

202

 

 

12.7

%

 

182

 

 

12.9

%

 

81

 

 

6.8

%

 

192

 

 

13.2%

Operating Profit (Loss) / Operating Margin Attributable to Celanese Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

130

 

 

20.2

%

 

235

 

 

11.3

%

 

62

 

 

10.8

%

 

84

 

 

16.0

%

 

(13

)

 

(3.1

)%

 

102

 

 

18.1%

Acetate Tow

16

 

 

13.4

%

 

118

 

 

22.7

%

 

30

 

 

22.4

%

 

30

 

 

23.3

%

 

31

 

 

24.4

%

 

27

 

 

20.9%

Acetyl Chain(1)

250

 

 

23.7

%

 

556

 

 

17.7

%

 

185

 

 

20.3

%

 

119

 

 

15.3

%

 

119

 

 

18.0

%

 

133

 

 

16.6%

Other Activities(2)

(71

)

 

 

 

(252

)

 

 

 

(75

)

 

 

 

(51

)

 

 

 

(56

)

 

 

 

(70

)

 

 

Total

325

 

 

18.1

%

 

657

 

 

11.6

%

 

202

 

 

12.7

%

 

182

 

 

12.9

%

 

81

 

 

6.8

%

 

192

 

 

13.2%

Equity Earnings and Dividend Income, Other Income (Expense) Attributable to Celanese Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

25

 

 

 

 

115

 

 

 

 

15

 

 

 

 

21

 

 

 

 

26

 

 

 

 

53

 

 

 

Acetate Tow

41

 

 

 

 

126

 

 

 

 

29

 

 

 

 

28

 

 

 

 

32

 

 

 

 

37

 

 

 

Acetyl Chain

2

 

 

 

 

5

 

 

 

 

2

 

 

 

 

2

 

 

 

 

 

 

 

 

1

 

 

 

Other Activities(2)

1

 

 

 

 

19

 

 

 

 

4

 

 

 

 

5

 

 

 

 

5

 

 

 

 

5

 

 

 

Total

69

 

 

 

 

265

 

 

 

 

50

 

 

 

 

56

 

 

 

 

63

 

 

 

 

96

 

 

 

Non-Operating Pension and Other Post-Retirement Employee Benefit (Expense) Income Attributable to Celanese Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

 

 

 

 

1

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acetate Tow

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acetyl Chain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Activities(2)

38

 

 

 

 

16

 

 

 

 

(67

)

 

 

 

28

 

 

 

 

27

 

 

 

 

28

 

 

 

Total

38

 

 

 

 

17

 

 

 

 

(66

)

 

 

 

28

 

 

 

 

27

 

 

 

 

28

 

 

 

Gain (Loss) On Sale of Investments in Affiliates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

 

 

 

 

1,408

 

 

 

 

1,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acetate Tow

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acetyl Chain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Activities(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

1,408

 

 

 

 

1,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certain Items Attributable to Celanese Corporation (Table 8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

5

 

 

 

 

(1,356

)

 

 

 

(1,404

)

 

 

 

11

 

 

 

 

27

 

 

 

 

10

 

 

 

Acetate Tow

4

 

 

 

 

5

 

 

 

 

 

 

 

 

1

 

 

 

 

1

 

 

 

 

3

 

 

 

Acetyl Chain

30

 

 

 

 

7

 

 

 

 

 

 

 

 

5

 

 

 

 

(3

)

 

 

 

5

 

 

 

Other Activities(2)

11

 

 

 

 

128

 

 

 

 

110

 

 

 

 

7

 

 

 

 

3

 

 

 

 

8

 

 

 

Total

50

 

 

 

 

(1,216

)

 

 

 

(1,294

)

 

 

 

24

 

 

 

 

28

 

 

 

 

26

 

 

 

___________________________

(1)

Net earnings (loss) attributable to NCI is included within the Acetyl Chain segment.

(2)

Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

 
Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited (cont.)
 

Q1 '21

 

2020

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

(In $ millions, except percentages)

Adjusted EBIT / Adjusted EBIT Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

160

 

 

24.8

%

 

403

 

 

19.4

%

 

82

 

 

14.3

%

 

116

 

 

22.1

%

 

40

 

 

9.5

%

 

165

 

 

29.3

%

Acetate Tow

61

 

 

51.3

%

 

249

 

 

48.0

%

 

59

 

 

44.0

%

 

59

 

 

45.7

%

 

64

 

 

50.4

%

 

67

 

 

51.9

%

Acetyl Chain

282

 

 

26.7

%

 

568

 

 

18.0

%

 

187

 

 

20.5

%

 

126

 

 

16.2

%

 

116

 

 

17.5

%

 

139

 

 

17.4

%

Other Activities(2)

(21

)

 

 

 

(89

)

 

 

 

(28

)

 

 

 

(11

)

 

 

 

(21

)

 

 

 

(29

)

 

 

Total

482

 

 

26.8

%

 

1,131

 

 

20.0

%

 

300

 

 

18.9

%

 

290

 

 

20.6

%

 

199

 

 

16.7

%

 

342

 

 

23.4

%

Depreciation and Amortization Expense(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

33

 

 

 

 

129

 

 

 

 

32

 

 

 

 

33

 

 

 

 

32

 

 

 

 

32

 

 

 

Acetate Tow

10

 

 

 

 

36

 

 

 

 

10

 

 

 

 

9

 

 

 

 

9

 

 

 

 

8

 

 

 

Acetyl Chain

41

 

 

 

 

162

 

 

 

 

41

 

 

 

 

41

 

 

 

 

41

 

 

 

 

39

 

 

 

Other Activities(2)

4

 

 

 

 

17

 

 

 

 

4

 

 

 

 

5

 

 

 

 

4

 

 

 

 

4

 

 

 

Total

88

 

 

 

 

344

 

 

 

 

87

 

 

 

 

88

 

 

 

 

86

 

 

 

 

83

 

 

 

Operating EBITDA / Operating EBITDA Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

193

 

 

29.9

%

 

532

 

 

25.6

%

 

114

 

 

19.9

%

 

149

 

 

28.3

%

 

72

 

 

17.1

%

 

197

 

 

35.0

%

Acetate Tow

71

 

 

59.7

%

 

285

 

 

54.9

%

 

69

 

 

51.5

%

 

68

 

 

52.7

%

 

73

 

 

57.5

%

 

75

 

 

58.1

%

Acetyl Chain

323

 

 

30.6

%

 

730

 

 

23.2

%

 

228

 

 

25.1

%

 

167

 

 

21.5

%

 

157

 

 

23.7

%

 

178

 

 

22.3

%

Other Activities(2)

(17

)

 

 

 

(72

)

 

 

 

(24

)

 

 

 

(6

)

 

 

 

(17

)

 

 

 

(25

)

 

 

Total

570

 

 

31.7

%

 

1,475

 

 

26.1

%

 

387

 

 

24.3

%

 

378

 

 

26.8

%

 

285

 

 

23.9

%

 

425

 

 

29.1

%

___________________________

(1)

Excludes accelerated depreciation and amortization expense, which amounts are included in Certain Items above. See Table 1 for details.

(2)

Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

 

Table 3

Adjusted Earnings (Loss) per Share - Reconciliation of a Non-GAAP Measure - Unaudited

 

 

Q1 '21

 

2020

 

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

 

 

per
share

 

 

 

per
share

 

 

 

per
share

 

 

 

per
share

 

 

 

per
share

 

 

 

per
share

 

(In $ millions, except per share data)

Earnings (loss) from continuing operations attributable to Celanese Corporation

323

 

 

2.83

 

1,997

 

 

16.85

 

1,453

 

 

12.50

 

209

 

 

1.76

 

110

 

 

0.93

 

225

 

 

1.88

Income tax provision (benefit)

85

 

 

 

 

247

 

 

 

 

117

 

 

 

 

30

 

 

 

 

35

 

 

 

 

65

 

 

 

Earnings (loss) from continuing operations before tax

408

 

 

 

 

2,244

 

 

 

 

1,570

 

 

 

 

239

 

 

 

 

145

 

 

 

 

290

 

 

 

Certain Items attributable to Celanese Corporation (Table 8)

50

 

 

 

 

(1,216

)

 

 

 

(1,294

)

 

 

 

24

 

 

 

 

28

 

 

 

 

26

 

 

 

Refinancing and related expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings (loss) from continuing operations before tax

458

 

 

 

 

1,028

 

 

 

 

276

 

 

 

 

263

 

 

 

 

173

 

 

 

 

316

 

 

 

Income tax (provision) benefit on adjusted earnings(1)

(64

)

 

 

 

(123

)

 

 

 

(33

)

 

 

 

(32

)

 

 

 

(18

)

 

 

 

(41

)

 

 

Adjusted earnings (loss) from continuing operations(2)

394

 

 

3.46

 

905

 

 

7.64

 

243

 

 

2.09

 

231

 

 

1.95

 

155

 

 

1.30

 

275

 

 

2.29

 

Diluted shares (in millions)(3)

Weighted average shares outstanding

113.5

 

 

 

 

117.8

 

 

 

 

115.7

 

 

 

 

118.0

 

 

 

 

118.3

 

 

 

 

119.3

 

 

 

Incremental shares attributable to equity awards

0.5

 

 

 

 

0.7

 

 

 

 

0.6

 

 

 

 

0.6

 

 

 

 

0.5

 

 

 

 

0.6

 

 

 

Total diluted shares

114.0

 

 

 

 

118.5

 

 

 

 

116.3

 

 

 

 

118.6

 

 

 

 

118.8

 

 

 

 

119.9

 

 

 

______________________________

(1)

Calculated using adjusted effective tax rates (Table 3a) as follows:

 

Q1 '21

 

2020

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

(In percentages)

Adjusted effective tax rate

14

 

 

 

 

12

 

 

 

 

12

 

 

 

 

12

 

 

 

 

10

 

 

 

 

13

 

 

 

 

(2)

Excludes the immediate recognition of actuarial gains and losses and the impact of actual vs. expected plan asset returns.

 

 

Actual Plan
Asset Returns

 

Expected Plan
Asset Returns

 

 

(In percentages)

2020

 

12.4

 

6.5

 

(3)

Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive.

 

Table 3a

Adjusted Tax Rate - Reconciliation of a Non-GAAP Measure - Unaudited

 

 

Estimated

 

Actual

 

2021

 

2020

 

(In percentages)

US GAAP annual effective tax rate

17

 

 

11

 

Discrete quarterly recognition of GAAP items(1)

(1

)

 

12

 

Tax impact of other charges and adjustments(2)

(2

)

 

(9

)

Utilization of foreign tax credits

(1

)

 

(3

)

Changes in valuation allowances, excluding impact of other charges and adjustments(3)

1

 

 

 

Other(4)

 

 

1

 

Adjusted tax rate

14

 

 

12

 

______________________________

Note: As part of the year-end reconciliation, we updated the reconciliation of the GAAP effective tax rate for actual results.

(1)

Such as changes in tax laws (including US tax reform), deferred taxes on outside basis differences, changes in uncertain tax positions and prior year audit adjustments.

(2)

Reflects the tax impact on pre-tax adjustments presented in Certain Items (Table 8), which are excluded from pre-tax income for adjusted earnings per share purposes.

(3)

Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations, excluding other charges and adjustments.

(4)

Tax impacts related to full-year forecasted tax opportunities and related costs.

 

Table 4

Net Sales by Segment - Unaudited

 

 

Q1 '21

 

2020

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

(In $ millions)

Engineered Materials

645

 

 

2,081

 

 

572

 

 

526

 

 

420

 

 

563

 

Acetate Tow

119

 

 

519

 

 

134

 

 

129

 

 

127

 

 

129

 

Acetyl Chain

1,056

 

 

3,147

 

 

910

 

 

776

 

 

662

 

 

799

 

Intersegment eliminations(1)

(22

)

 

(92

)

 

(25

)

 

(20

)

 

(16

)

 

(31

)

Net sales

1,798

 

 

5,655

 

 

1,591

 

 

1,411

 

 

1,193

 

 

1,460

 

___________________________

(1)

Includes intersegment sales primarily related to the Acetyl Chain.

 

Table 4a

Factors Affecting Segment Net Sales Sequentially - Unaudited

 

Three Months Ended March 31, 2021 Compared to Three Months Ended December 31, 2020

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

6

 

 

6

 

 

1

 

 

 

 

13

 

 

Acetate Tow

(10

)

 

(1

)

 

 

 

 

 

(11

)

 

Acetyl Chain

(7

)

 

23

 

 

 

 

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

(3

)

 

15

 

 

1

 

 

 

 

13

 

 

 

Three Months Ended December 31, 2020 Compared to Three Months Ended September 30, 2020

 

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

7

 

 

 

 

2

 

 

 

 

9

 

 

Acetate Tow

4

 

 

(1

)

 

 

 

 

 

3

 

 

Acetyl Chain

6

 

 

10

 

 

1

 

 

 

 

17

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

7

 

 

5

 

 

1

 

 

 

 

13

 

 

 

Three Months Ended September 30, 2020 Compared to Three Months Ended June 30, 2020

 

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

27

 

 

(6

)

 

4

 

 

 

 

25

 

 

Acetate Tow

1

 

 

1

 

 

1

 

 

 

 

3

 

 

Acetyl Chain

18

 

 

(2

)

 

1

 

 

 

 

17

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

20

 

 

(3

)

 

2

 

 

(1

)

 

18

 

 

 

Three Months Ended June 30, 2020 Compared to Three Months Ended March 31, 2020

 

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

(25

)

 

 

 

 

 

 

 

(25

)

 

Acetate Tow

(3

)

 

1

 

 

 

 

 

 

(2

)

 

Acetyl Chain

(6

)

 

(11

)

 

 

 

 

 

(17

)

(1)

 

 

 

 

 

 

 

 

 

 

 

Total Company

(13

)

 

(6

)

 

 

 

1

 

 

(18

)

 

 

Three Months March 31, 2020 Compared to Three Months Ended December 31, 2019

 

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

4

 

 

 

 

 

 

 

 

4

 

 

Acetate Tow

(9

)

 

(4

)

 

 

 

 

 

(13

)

 

Acetyl Chain

5

 

 

(1

)

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

3

 

 

(1

)

 

 

 

 

 

2

 

 

________________________

(1)

2020 includes the effect of the acquisition of the Elotex brand.

 

Table 4b

Factors Affecting Segment Net Sales Year Over Year - Unaudited

 

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

 

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

7

 

 

2

 

 

6

 

 

 

 

15

 

 

Acetate Tow

(8

)

 

 

 

 

 

 

 

(8

)

 

Acetyl Chain

5

 

 

25

 

 

2

 

 

 

 

32

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

5

 

 

14

 

 

4

 

 

 

 

23

 

 

 

Three Months Ended December 31, 2020 Compared to Three Months Ended December 31, 2019

 

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

6

 

 

(4

)

 

4

 

 

 

 

6

 

 

Acetate Tow

(7

)

 

(3

)

 

1

 

 

 

 

(9

)

 

Acetyl Chain

19

 

 

(3

)

 

2

 

 

 

 

18

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

12

 

 

(4

)

 

3

 

 

 

 

11

 

 

 

Three Months Ended September 30, 2020 Compared to Three Months Ended September 30, 2019

 

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

(10

)

 

(3

)

 

2

 

 

 

 

(11

)

 

Acetate Tow

(15

)

 

(3

)

 

 

 

 

 

(18

)

 

Acetyl Chain

(1

)

 

(11

)

 

1

 

 

 

 

(11

)

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

(6

)

 

(7

)

 

1

 

 

1

 

 

(11

)

 

 

Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019

 

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

(27

)

 

(1

)

 

(1

)

 

 

 

(29

)

 

Acetate Tow

(18

)

 

(5

)

 

 

 

 

 

(23

)

 

Acetyl Chain

(14

)

 

(8

)

 

(1

)

 

 

 

(23

)

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

(20

)

 

(5

)

 

(1

)

 

1

 

 

(25

)

 

 

Three Months March 31, 2020 Compared to Three Months Ended March 31, 2019

 

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

(9

)

 

(5

)

 

(1

)

 

 

 

(15

)

 

Acetate Tow

(17

)

 

(5

)

 

 

 

 

 

(22

)

 

Acetyl Chain

(3

)

 

(7

)

 

(1

)

 

1

 

 

(10

)

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

(7

)

 

(6

)

 

(1

)

 

1

 

 

(13

)

 

 

Table 4c

Factors Affecting Segment Net Sales Year Over Year - Unaudited

 

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

 

Volume

 

Price

 

Currency

 

Other

 

Total

 

 

(In percentages)

 

Engineered Materials

(11

)

 

(3

)

 

1

 

 

 

 

(13

)

 

Acetate Tow

(14

)

 

(4

)

 

 

 

 

 

(18

)

 

Acetyl Chain

 

 

(8

)

 

1

 

 

 

 

(7

)

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

(5

)

 

(6

)

 

 

 

1

 

 

(10

)

 

 

Table 5

Free Cash Flow - Reconciliation of a Non-GAAP Measure - Unaudited

 

 

Q1 '21

 

2020

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

(In $ millions, except percentages)

Net cash provided by (used in) investing activities

98

 

 

592

 

 

979

 

 

(78

)

 

(181

)

 

(128

)

Net cash provided by (used in) financing activities

(371

)

 

(1,471

)

 

(933

)

 

(290

)

 

(232

)

 

(16

)

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

116

 

 

1,343

 

 

274

 

 

431

 

 

379

 

 

259

 

Capital expenditures on property, plant and equipment

(92

)

 

(364

)

 

(85

)

 

(72

)

 

(88

)

 

(119

)

Distributions to NCI

(5

)

 

(29

)

 

(8

)

 

(8

)

 

(8

)

 

(5

)

Free cash flow(1)(2)

19

 

 

950

 

 

181

 

351

 

 

283

 

 

135

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

1,798

 

 

5,655

 

 

1,591

 

 

1,411

 

 

1,193

 

 

1,460

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow as % of Net sales

1.1

%

 

16.8

%

 

11.4

%

 

24.9

%

 

23.7

%

 

9.2

%

______________________________

(1)

Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operating activities, less capital expenditures on property, plant and equipment, and adjusted for capital contributions or distributions to Mitsui related to our joint venture, Fairway.

(2)

Excludes required debt service and finance lease payments of $30 million and $26 million for the years ended December 31, 2021 and 2020, respectively.

 

Table 6

Cash Dividends Received - Unaudited

 

 

Q1 '21

 

2020

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

(In $ millions)

Dividends from equity method investments

35

 

 

147

 

 

36

 

 

6

 

 

59

 

 

46

 

Dividends from equity investments without readily determinable fair values

42

 

 

126

 

 

28

 

 

29

 

 

32

 

 

37

 

Total

77

 

 

273

 

 

64

 

 

35

 

 

91

 

 

83

 

 

Table 7

Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited

 

 

Q1 '21

 

2020

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

(In $ millions)

Short-term borrowings and current installments of long-term debt - third party and affiliates

497

 

 

496

 

 

496

 

 

958

 

 

1,045

 

 

749

 

Long-term debt, net of unamortized deferred financing costs

3,135

 

 

3,227

 

 

3,227

 

 

3,140

 

 

2,989

 

 

3,356

 

Total debt

3,632

 

 

3,723

 

 

3,723

 

 

4,098

 

 

4,034

 

 

4,105

 

Cash and cash equivalents

(791

)

 

(955

)

 

(955

)

 

(615

)

 

(539

)

 

(570

)

Net debt

2,841

 

 

2,768

 

 

2,768

 

 

3,483

 

 

3,495

 

 

3,535

 

 

Table 8

Certain Items - Unaudited

 

The following Certain Items attributable to Celanese Corporation are included in Net earnings (loss) and are adjustments to non-GAAP measures:

 

 

Q1 '21

 

2020

 

Q4 '20

 

Q3 '20

 

Q2 '20

 

Q1 '20

 

Income Statement Classification

 

(In $ millions)

 

 

Plant/office closures

(5

)

 

10

 

 

7

 

 

4

 

 

(4

)

 

3

 

 

Cost of sales / SG&A / Other (charges) gains, net / Gain (loss) on disposition of businesses and assets, net

Asset impairments

1

 

 

31

 

 

 

 

2

 

 

25

 

 

4

 

 

Cost of sales / Other (charges) gains, net

Clear Lake incident

 

 

4

 

 

 

 

 

 

 

 

4

 

 

Cost of sales

COVID-19

 

 

5

 

 

2

 

 

1

 

 

1

 

 

1

 

 

Cost of sales / SG&A

Mergers, acquisitions and dispositions

 

 

22

 

 

5

 

 

7

 

 

3

 

 

7

 

 

Cost of sales / SG&A

Impact from natural disasters

41

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

Actuarial (gain) loss on pension and postretirement plans

 

 

95

 

 

95

 

 

 

 

 

 

 

 

Cost of sales / SG&A / Non-operating pension and other postretirement employee benefit (expense) income

Restructuring

3

 

 

25

 

 

5

 

 

11

 

 

2

 

 

7

 

 

SG&A / Other (charges) gains, net / Non-operating pension and other postretirement employee benefit (expense) income

European Commission investigation

 

 

2

 

 

 

 

 

 

2

 

 

 

 

Other (charges) gains, net

Commercial disputes

9

 

 

(1

)

 

 

 

 

 

(1

)

 

 

 

Cost of sales / SG&A / Other (charges) gains, net

(Gain) loss on sale of investments in affiliates

 

 

(1,408

)

 

(1,408

)

 

 

 

 

 

 

 

Gain (loss) on sale of investments in affiliates

Other

1

 

 

(1

)

 

 

 

(1

)

 

 

 

 

 

SG&A / Gain (loss) on disposition of businesses and assets, net

Certain Items attributable to Celanese Corporation

50

 

 

(1,216

)

 

(1,294

)

 

24

 

 

28

 

 

26

 

 

 

 

Table 9

Return on Invested Capital (Adjusted) - Presentation of a Non-GAAP Measure - Unaudited

 

 

 

 

 

 

2020

 

 

 

 

 

(In $ millions, except percentages)

Net earnings (loss) attributable to Celanese Corporation

 

 

 

 

1,985

 

 

 

 

 

 

 

Adjusted EBIT (Table 1)

 

 

 

 

1,131

 

Adjusted effective tax rate (Table 3a)

 

 

 

 

12

%

Adjusted EBIT tax effected

 

 

 

 

995

 

 

 

 

 

 

 

 

2020

 

2019

 

Average

 

(In $ millions, except percentages)

Short-term borrowings and current installments of long-term debt - third parties and affiliates

496

 

 

496

 

 

496

 

Long-term debt, net of unamortized deferred financing costs

3,227

 

 

3,409

 

 

3,318

 

Celanese Corporation stockholders' equity

3,526

 

 

2,507

 

 

3,017

 

Invested capital

 

 

 

 

6,831

 

 

 

 

 

 

 

Return on invested capital (adjusted)

 

 

 

 

14.6

%

 

 

 

 

 

 

Net earnings (loss) attributable to Celanese Corporation as a percentage of invested capital

 

 

 

 

29.1

%

 

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Disclaimer

Celanese Corporation Reports First Quarter 2021 Earnings; Raises Full Year Financial Outlook Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, today reported first quarter GAAP diluted earnings per share of $2.83 and adjusted earnings per share of $3.46. Net sales for the quarter were $1.8 billion as …

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